MOSCOW (MRC) -- U.S. oil refiners hunting to replace crude lost after a storm hit the U.S. Gulf of Mexico last month have been turning to Iraqi and Canadian oil, while Asian buyers have been pursuing Middle Eastern and Russian grades, analysts and traders said, as per Hydrocarbonprocessing.
Royal Dutch Shell, the largest producer in the U.S. Gulf of Mexico, this week said damage from Hurricane Ida to an offshore transfer facility will limit Mars sour crude supplies into early next year. The grade is used heavily by U.S. Gulf refiners and companies in South Korea and China, the top two export destinations for Mars.
The United States generally exports more than 3 million barrels per day (bpd) of oil, most from the U.S. Gulf Coast. With overall fuel demand rebounding to pre-pandemic levels, refiners will need to make up for the Mars shut-ins. The loss of up to 250,000 bpd has some U.S. refiners seeking replacements for fourth-quarter delivery, especially Iraq's Basra crude, traders said. Others received supplies of sour crude from U.S. storehouses.
Basra crude has come to the fore during past disruptions. In 2019, when U.S. sanctions on Venezuela cut off heavy crude grades to Gulf refiners, Iraq rapidly boosted cargoes. Canadian heavy-oil suppliers also benefited.
ExxonMobil and Placid Refining Co have received oil from the U.S. Strategic Petroleum Reserve (SPR), addressing immediate needs for sour crude.
Refiner Marathon Petroleum has bought Basra for October loading, one trader said. Suezmax tanker Jag Leena is provisionally booked to load 1 million barrels of Basra Light crude on Oct. 10 for the United States, data on Refinitiv Eikon showed, although it was not immediately clear which company chartered the ship.
U.S. refiners able to process and blend heavier crudes also have shown interest in Canadian and Latin American grades, traders added. Marathon declined to comment.
As per MRC, Saudi Basic Industries (SABIC), the world's fourth-biggest petrochemicals firm, said its joint venture project with ExxonMobil in the US Gulf Coast has started commissioning activities and preparing for an initial startup. The project includes the establishment of an ethylene production unit with annual capacity of about 1.8 MMtpy, which will feed two polyethylene (PE) units and a monoethylene glycol (MEG) unit, it said in a statement.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.
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